U.S. net farm income is forecast to exceed $122 billion in 2012 and net cash income is expected to exceed $139 billion, both record nominal values, according to the Agriculture Department’s Economic Research Service.
If these income forecasts are on target, they will set all-time records in all three measures of farm income—net farm income, net cash income and net value added.
Despite the severity of the 2012 drought, shortfalls in marketing year production do not necessarily have a detrimental impact on sector-wide farm income, USDA said. Shortages raise the prices farmers receive for crops sold in calendar-year 2012, and crop insurance partially offsets the impact of lower yields.
ERS: 2012 Farm Sector Income Forecast